SALE AND TAXATION OF GOODS OVER THE INTERNET

Initial State Response

In order to help collect these use tax revenues states began to implement the use tax directly on residents.The problem with this though, is that no one really reports his or her out of state purchases, and its very difficult to enforce this actual provision.So in effect, states rarely seem to reap any tax revenues, and the only time they have the ability to enforce are on bigger purchases such as cars and boats.Some states, like California and New York, have begun to add a separate line on tax returns for out of state purchases.

b) Liability. -- The tax imposed by this section is payable by the person who purchases, leases, or rents tangible personal property or digital property or who purchases a service. If the property purchased becomes a part of a building or other structure in the State and the purchaser is a contractor or subcontractor, the contractor, the subcontractor, and the owner of the building are jointly and severally liable for the tax. The liability of a contractor, a subcontractor, or an owner who did not purchase the property is satisfied by receipt of an affidavit from the purchaser certifying that the tax has been paid.

(c) Credit. -- A credit is allowed against the tax imposed by this section for the following:

(1) The amount of sales or use tax paid on the item to this State. Payment of sales or use tax to this State on an item by a retailer extinguishes the liability of a purchaser for the tax imposed under this section.

(2) The amount of sales or use tax paid on the item to another state. If the amount of tax paid to the other state is less than the amount of tax imposed by this section, the difference is payable to this State. The credit allowed by this subdivision does not apply to tax paid to a state that does not grant a similar credit for sales or use taxes paid in North Carolina.